'Medicare Tax' Now to be Called 'Unearned Income Medicare Contribution' — ProPublica

'Medicare Tax' Now to be Called 'Unearned Income Medicare Contribution'

Under the health care reconciliation proposal, individuals with earnings over $200,000 and couples with earnings over $250,000 will have to fork over 3.8 percent of their capital gains. But the bill isn't calling this a tax.

March 24, 2010, 11:27 a.m. EDT

The payroll tax increase that was formerly known as "Medicare tax" in both President Obama’s health care reform reconciliation proposal and the original House reconciliation bill is NOT A TAX. Repeat: NOT A TAX.

Sure, individuals with earnings over $200,000 and couples with earnings over $250,000 will have to fork over 3.8 percent of their capital gains (which were not formerly subject to Medicare taxes) to Medicare, in addition to .9 percent more of their earned income.

But among the 15 pages of changes to the Reconciliation Act included in the manager’s amendment released over the weekend was a wee name change: references to ‘Medicare tax’ were deleted, and replaced with the much gentler, and voluntary-sounding, ‘unearned income Medicare contribution.’

We called Speaker Nancy Pelosi’s office for more insight, and will pass along anything we hear back.

For a look at all the changes that the reconciliation bill would make in the health care reform law, check out our side-by-side comparison.

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